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Farm Events: |
Farm News: Coop Bill On To Gov's DeskcommentsPosted: 01.18.2012
During the first floor session of 2012, the Wisconsin State Senate unanimously approved bi-partisan legislation to revitalize cooperative business development and spur local economic growth.
Authored by Representative Al Ott (R-Forest Junction), Assembly Bill 228 restores a long-standing registration exemption for cooperatives offering securities. This exemption is an important tool for both new and existing cooperative businesses.
“I am pleased with the Senate’s bi-partisan approval of this important economic development bill,” said Ott. “Wisconsin is home to the second most cooperative businesses in the nation, which means the continued development and success of these businesses are vital to the state’s economy.”
Assembly Bill 228 restores an exemption for cooperatives from having to file with the Department of Financial Institutions if they are going to offer the sale of securities such as preferred stock. The sale of these securities provides the capital to launch new cooperatives or grow existing cooperative businesses.
“This measure will reinstate a functional registration exemption, which has proven to be critical to establishing successful Wisconsin cooperative businesses,” Ott said. “Wisconsin cooperative businesses not only return their profits to local member-owners, they also create Wisconsin jobs.”
An update to the federal Uniform Securities Law resulted in a significantly narrowed and considerably more restrictive state-level securities registration exemption for cooperatives. The redesigned exemption has been a significant barrier to cooperative development.
“The current restrictive exemption has resulted in confusion, delays, and substantial new legal costs for cooperative business start-ups,” stated Ott. “These costs are proving to be a deciding factor in whether or not to move forward with a new cooperative business.”
The formation of a new cooperative often requires the sale of preferred stock to individuals willing to assist with financing a cooperative’s start-up. The costs associated with the current registration requirements, which are necessary to offer such preferred stock, have put the brakes on opportunities to create cooperative businesses that can add value to goods, provide desirable services, and strengthen communities – particularly rural communities – across Wisconsin.
“This legislation will restore vitality to cooperative business development in Wisconsin and will likely get a number of stalled cooperative projects off the ground,” said Ott.
Assembly Bill 228 now moves on to Governor Walker for his consideration in signing the measure into law.
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